Tuesday, May 1, 2012

The Rise of The Vertical Cloud

While some are happy to debate definitions of cloud computing, I prefer to focus on the characteristics that make successful companies, successful. Lately there seems to have been a shift from the anything for anyone cloud to the industry or vertically focused cloud. Adding to this is today's piece of news from Zynga who announced what they describe as "the beta release of Zynga.com, a new service enabling third party developers to create and publish games on the Zynga Platform." Yes, that company that brought you farmville is now going to be a cloud service provider enabling a whole new crop of game companies, which I can only assume they will acquire when the time is right.

So why is this news important? It's another great example of a trend in the cloud computing sector of "Vertically focused" cloud products and services. In the early days, there was this mentality of just build it and they would come. Problem was that for most, they never really came. Instead you had a handful of very large players and everyone else fighting over the table scraps. What those who survived learned, is that in order to be successful it isn't about being the best funded or even the best performing, but instead it is about being the most focused on the needs of a particular customer vertical. Those who focus on a particular problem, be it for a particular enterprise sector, application or customer need will have a clear and distinct differentiation in a market dominated by me-too cloud services.

This trend certainly isn't unique to the cloud space, look at Facebook as an example. In an early market they were able to quickly gain a dominate position as a fairly generic social network. As the social market began maturing you started to see the most successful companies becoming more and more laser focused. A great example is Instagram who according to Mashable now has more than 50 million users and is gaining about 5 million users per week, not to mention it was recently acquired by Facebook for 1 billion dollars. They succeed because of their ability to focus on a vertical. This trend seems to be gaining momentum recently with apps like SocialCam seeing astounding growth by focusing on the vertical niche opportunities over looked by their larger, better funded competition.. TechCrunch reported that SocialCam jumped from 12 million users last week to 20 million users today. Yes, 8 million new users in 1 week. Focus Focus Focus. Where's youtube?

So what does a consumer focused app and a gaming company have to do with Cloud computing? Everything, as our market matures we are beginning to see the same sort of vertical focus for the most successful new bread of cloud companies entering the scene. No longer is it acceptable to want to be a clone of Amazon or who ever you consider to be the leader in a particular sector. Nor is it wise. Those who focus on the industry sectors neglected by the largest players will see the most success and will be selling themselves for an Instagram or two.(1 instgram = $1 Billion USD)

#DigitalNibbles Podcast Sponsored by Intel

Instagram

-{ruv.net }-

Reuven Cohen ~ @ruv

An instigator, part time provocateur, bootstrapper, amateur cloud lexicographer, and purveyor of random thoughts, 140 characters at a time.

Reuven is an early innovator in the cloud computing space as the founder of Toronto based Enomaly in 2004 (Acquired by Virtustream in 2012). Enomaly was among the first to develop a self service infrastructure as a service (IaaS) platform (ECP) circa 2005. As well as SpotCloud (2011) the first commodity style cloud computing Spot Market.

Today he leads Citrix (NASDAQ: CTXS) world wide advocacy efforts with a particular focus on increasing the volume, reach and influence of Citrix's extensive portfolio of technology solutions used by more than 260,000 customers and 100 million end users across the globe.

Reuven writes "The Digital Provocateur" column for Forbes Magazine, he is the co-founder of CloudCamp (100+ Cities around the Globe) CloudCamp is an unconference where early adopters of Cloud Computing technologies exchange ideas and is the largest of the ‘barcamp’ style of events. He is also the co-host of the DigitalNibbles Podcast sponsored by Intel